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Just learned about hedging, does anyone use it for scalping?

  • #601
  • Sep 17, 2020 6:50pm Sep 17, 2020 6:50pm
Quoting GEfx
{quote} I'm trying to reconcile your chart that stated you earned 10% gain on the GJ basket. From your latest post, you made 10% gain trading on $.10 per pip. So the mystery deepens. The chart shows one thing but the spreadsheet another. So you made 10% on the GJ, but the 4 trades from today made about 60 cents. You're account balance is about $550, so the rest of the GJ basket made around $50? On "hedged" trades that were negative? I'm still interested in how that all worked out. I do think that if you can make 10% per week with a $550 account,...
This post has MAGICALLY disappeared and now reappeared WEIRD, anyways. I oppened 3 NOT 4 SELL trades today and they amounted to approx £65 when I closed the basket, not sure where you get 60 cents from? Account balance was about £447 on closing the basket and my profit from the basket was about £43 so you were not far off there The closed trades including ALL WINNERS AND LOSERS from that basket is on POST 586.
  • #602
  • Sep 17, 2020 6:57pm Sep 17, 2020 6:57pm
Quoting GEfx
{quote} My question was the result of reading your post #523. You started your post by assuming that traders that use stops lose, resulting in falling balances while somehow benefiting brokers. Then, you state that "hedging" results in profits. Never another loss. Ever. To me, this jump seemed....strange. But one way to never have a loss with "hedging", is to "hedge" all losses, forever, and only realize trades that are in profit. There is, of course, a limit to this. The "hedged" losses won't show up in your balance, but your equity will eventually...
Yes, I said no need to accept a loss. Period.
Hedging a trade that takes a trader into margin call is not the fault of the hedge but the traders understanding of current position.
Why close a trade in loss when there is a chance of hedging to break even or greater of which there is no loss.
I have the option of setting a hedge. So I will not accept a loss.
Doesn't mean I wont get a loss while hedging...slip ups, fudge fingers, not paying attention all comes into it.
But that's technique and not the fault of hedging.

And that's what this thread is really boiling down to, not the hedging aspect but individual technique used by a trader to hedge.
  • #603
  • Sep 17, 2020 7:29pm Sep 17, 2020 7:29pm
Quoting wingate
{quote} This post has MAGICALLY disappeared and now reappeared WEIRD, anyways. I oppened 3 NOT 4 SELL trades today and they amounted to approx £65 when I closed the basket, not sure where you get 60 cents from? Account balance was about £447 on closing the basket and my profit from the basket was about £43 so you were not far off there The closed trades including ALL WINNERS AND LOSERS from that basket is on POST 586.
Yeah, things are magically changing all over the place. You updated post 586 with the spreadsheet. Your post 590 showed the positions from trading today, and showed .59 from GJ trading today. All the other claims about 5 days of trading , making 43 on the basket, etc, seem tied to the spreadsheet added a while ago. I've spent too much time trying on the forensics here. I have grave doubts about the story you've told here, but I'll refrain from accusing you further. Best of luck.
  • #604
  • Sep 18, 2020 12:41am Sep 18, 2020 12:41am
Stepping up to the podium...

Hedging is like using a credit card to buy that new laptop computer. At first you feel great, right? You get to use a new, fast computer for free!! And your bank account remains the same as before.

And then a short time later reality sets in -- the bank demands its money back. The truth is our net value declined the moment we plunked
down that credit card, though our mind rationalizes that we somehow came out ahead.

I have nothing against hedging -- and if hedging is what gets you to focus and pay attention, then more power to you. My point is that the mechanics of hedging do not result in an advantage. If there is a successful outcome it is because of the additional time and attention and TLC that you devote when nursing a losing trade. If that same time and attention and TLC had been applied to new setups then the result could have been the same -- or, perhaps, even better.

Stepping down from the podium...
  • #605
  • Sep 18, 2020 12:59am Sep 18, 2020 12:59am
Quoting wingate
A Simple question requiring a SIMPLE ANSWER ONLY to both STrading and NUMBNUTS (sorry NubCake).
Men, they are too slow to understand that. Guys are 10+ years on FF still can't understand basics. They are just trolling. Don't waste your time.

Let's discuss this: best practice to exit hedge with max profit? I have tested several ideas. For me best is to exit with any profit. But I'm using hedges instead of sl if my position didn't close in profit and all reverse. For the whole hedge strategy it is not good. For example you have 1 short and 3 longs. Then 1 and 1 is a lock and 2 more gain profit. Then you can close all when 1 of 2 (in this example, or 15 of 14, or 7 of 21 etc) become lossy etc.
Observer effect
  • #606
  • Sep 18, 2020 2:37am Sep 18, 2020 2:37am
Quoting GEfx
{quote} Yeah, things are magically changing all over the place. You updated post 586 with the spreadsheet. Your post 590 showed the positions from trading today, and showed .59 from GJ trading today. All the other claims about 5 days of trading , making 43 on the basket, etc, seem tied to the spreadsheet added a while ago. I've spent too much time trying on the forensics here. I have grave doubts about the story you've told here, but I'll refrain from accusing you further. Best of luck.
I have not UPDATED ANY OF MY POSTS PERIOD how dare you !!!!!!!!!!!!!!!!! The spreadsheet you refer to on POST 586 as you CORRECTLY say relates to the basket I held for 5 DAYS and eventually closed yesterday for an overall profit of £43 nothing changed there!!!

POST 590 was my NEXT BASKET (If you looked closely enough you would have noticed this basket consisted NOT ONLY of GBPJPY but also EURJPY AND AUDJPY).

My following post to you was POST 599 where I attempted to answer your questions as HONESTLY AS POSSIBLE. If you refer to that post you will CLEARLY see THIS BASKET IN REAL TIME (this is the same basket as post 590 but a little later doh...)!!! I then CLOSED this basket before going to bed THIS MORNING at around 1pm GMT (see below and pay PARTICULAR attention to the time they were closed).

I previously said you would try to pick holes in my trades, wasn't wrong there was I.
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  • #607
  • Sep 18, 2020 3:04am Sep 18, 2020 3:04am
I am the only person here who has provided REAL TRADES in REAL TIME as they happen. I have NO ULTERIOR MOTIVE, I am NOT SELLING ANYTHING. I have shown a way of trading that works for me and have posted for the benefit of anyone who may be interested, THAT IS ALL. Take it or leave it for what it's worth, I couldn't give a shit quite honestly.

For those of you who have kindly sent me PM's, one final screenshot below of my current basket, opened this morning FRIDAY 18TH SEPTEMBER 2020.
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  • #608
  • Sep 18, 2020 3:23am Sep 18, 2020 3:23am
Quoting wingate
I am the only person here who has provided REAL TRADES in REAL TIME as they happen. I have NO ULTERIOR MOTIVE, I am NOT SELLING ANYTHING. I have shown a way of trading that works for me and have posted for the benefit of anyone who may be interested, THAT IS ALL. Take it or leave it for what it's worth, I couldn't give a shit quite honestly. For those of you who have kindly sent me PM's, one final screenshot below of my current basket, opened this morning FRIDAY 18TH SEPTEMBER 2020. {image}
haha well said man. I know it can be done. I wrote a lock step hedging solution for a guy a few years ago. He would pay what he had to pay for the design and development. His brief was simple enough:-

a) Fixed debt, drawdown < 10%
b) Can use minimum 1 standard lot per set
c) Be hedged at all times to avoid systemic market risk
d) Preferably automated, minimal involvement.

The rest was left to me to design around those requirements. It took several months to produce a stable system, fully automated. The solution is under NDA so cannot disclose nor would I want to anyway. Fair to say that swap is NOT an issue for the operators of this system, nor is account size. It can be done, and it is being done. Just because others can't do it, doesn't mean a motivated enough person cannot do it. I don't read or answer emails very often, I'm kind of retired from all that. In spare time am looking at chart trading for fun, does seem very risky to me but had some interesting insghts over at "Aussi's" thread. Working on a few other things as well.

Feel free to bash away, it will provide amusement for the few who realise what these forums have become.

swd
  • #609
  • Sep 18, 2020 3:33am Sep 18, 2020 3:33am
Two more screenshots to ponder for anyone who is interested and the NAYSAYERS who couldn't be bothered to even THINK OUTSIDE OF THE BOX.

Thought number ONE... Looking at the chart below of MY CURRENT BASKET which direction should my trades be 'biased' LONG OR SHORT?
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  • #610
  • Sep 18, 2020 3:42am Sep 18, 2020 3:42am
And Thought Number TWO... Basket 1 above CLOSED and basket 2 opened. Which direction should basket 2 be biased LONG OR SHORT?
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  • #611
  • Edited 4:03am Sep 18, 2020 3:44am | Edited 4:03am
People pm me asking about difference between sl and hedge, I'll reply here for all. I don't use sl because of several things.

  1. If sl is too far away then the loss will be huge. It can and will wipe out monthly/daily etc profit. Hard placed SL and TP is pure magic/luck especially with predefined RR ratio. They must be dynamic, but years of investigations still fail to find how. For now for me it is just impossible to use them.
  2. If sl is too tight then good and bad trades both become bad and in average there is a loss.
  3. SL is highly advertised, hedge is prohibited in USA and on crypto martker for example there are no hedge at all (on binance there is "fake" hedge on futures, that can't be used).
  4. Last but not least: I'm trading using robots, and there is no chance to win using SL. The same like there is no chance to win using averaging and grids. Math expectation is always negative. I heard lot of fairy tales about manual trader is better than robot and only great fast brain can see the picture... this does not stand up to criticizm.

But hedge is much better, because you don't lose your equity untill you close in loss. You let's say USING it. Borrow it if you want. Anyway you can use SL with hegdes why not.
Also if you trade several pairs at once this SL removes equity and available margin from your account, so the rize. Hedges only takes your equity and little margin for some time.

For those who can't still understand the math here is an example.
We have 3 sl in a row each takes 1%. Initial deposit is 10000. Then 10000-1%= 9990. 9990-1%=9801. 9801-1%=9702.99. So the loss will be 297.01 and trader now have 9702.99 of equity.
If we use hedge, then temporary we can have even the same equity DD, but then we exit with +1$. So now we have 10001, sl trader has 9702.99.
How many trades you have to make now (all good, never sl again) and how much time now you have to spend to gain 10000 back?


This thread is not for sl haters or hedge lovers. I think there are some good traders that never used hedge but always use sl. So it will be great if trolls will go away and so we can proceed discussing hedge technics.

Observer effect
  • #612
  • Sep 18, 2020 3:53am Sep 18, 2020 3:53am
Depending on which way the MARKET DECIDES TO GO go.....I WILL FOLLOW maybe up, maybe down who know's with any certainty I certainly don't. The ONLY thing that I WILL and WON'T do is the following...

I WILL only CLOSE a BASKET that is in OVERALL PROFIT

AND

I WILL never CLOSE A LOOSING BASKET
  • #613
  • Sep 18, 2020 4:17am Sep 18, 2020 4:17am
Same chart SAME BASKET as POST 610 above. Currently I am biased LONG but price is STUCK in a range. 1hr to 4hr remains SHORT, which way is it going to BREAKOUT? Who knows with any certainty? I sure as hell DO NOT but It ENEVITABLY will breakout at some point and I WILL FOLLOW it's path/bias accordingly.
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  • #614
  • Sep 18, 2020 4:44am Sep 18, 2020 4:44am
Quoting wingate
Depending on which way the MARKET DECIDES TO GO go.....I WILL FOLLOW maybe up, maybe down who know's with any certainty I certainly don't. The ONLY thing that I WILL and WON'T do is the following... I WILL only CLOSE a BASKET that is in OVERALL PROFIT AND I WILL never CLOSE A LOOSING BASKET
@wingate -- I have a question regarding losing baskets. Do you think you owe money on losing baskets or not? Or, if you do owe money on them, you don't care because you don't have to pay it right now?
  • #615
  • Sep 18, 2020 5:09am Sep 18, 2020 5:09am
Quoting robots4me
{quote} @wingate -- I have a question regarding losing baskets. Do you think you owe money on losing baskets or not? Or, if you do owe money on them, you don't care because you don't have to pay it right now?
Thank you for the question. There will be many times when you are CARRYING LOSSES within a BASKET of trades, this is INEVITABLE. I recently referred to these losses as PAPER LOSSES and got bombasted for calling them that by the TROLLS. The simple TRUTH is they are merely that PAPER TRADES in that EXACT MOMENT IN TIME (nothing else), they may go on to be WINNING TRADES by the time you CLOSE the BASKET or THEY MAY REMAIN TO BE LOOSING TRADES. The most IMPORTANT point is to ONLY CLOSE THE BASKET WHEN THE OVERALL BASKET IS IN A PROFIT, at which point ANY LOOSING TRADES within THE CLOSED BASKET BECOME IRRELEVANT!

I hope I answered your question, don't try to over think this, it really ISN'T rocket science.
  • #616
  • Sep 18, 2020 5:19am Sep 18, 2020 5:19am
Quoting wingate
I WILL never CLOSE A LOOSING BASKET
This is impossible, some day you will have to close loosing basket. Or you have infitine equity? )
Observer effect
  • #617
  • Edited 6:14am Sep 18, 2020 5:22am | Edited 6:14am
Quoting ryuryu
{quote} This is impossible, some day you will have to close loosing basket.
Why? As long as you are mindful of AVAILABLE MARGIN, YOU DO NOT OVERTRADE and are mindful of the LONGER TERM TIMEFRAME then there is NO reason why you should close a basket at a loss. YES there will enevitably be LOOSING trades within the basket but that is the cost of trading, no different to accepting a STOP LOSS.
  • #618
  • Sep 18, 2020 5:32am Sep 18, 2020 5:32am
Quoting wingate
{quote} Thank you for the question. There will be many times when you are CARRYING LOSSES within a BASKET of trades, this is INEVITABLE. I recently referred to these losses as PAPER LOSSES and got bombasted for calling them that by the TROLLS. The simple TRUTH is they are merely that PAPER TRADES in that EXACT MOMENT IN TIME (nothing else), they may go on to be WINNING TRADES by the time you CLOSE the BASKET or THEY MAY REMAIN TO BE LOOSING TRADES. The most IMPORTANT point is to ONLY CLOSE THE BASKET WHEN THE OVERALL BASKET IS IN A PROFIT, at which...
@wingate -- this is good. Thanks for your answer. It also helps to explain part of the disconnect or disagreement we are having here.

From an accountant's point of view (which I am not) -- everything in a financial account is either considered a credit or a debt. That's it. When tax time rolls around and my investments made money I can't suggest to my accountant that we treat them as "paper profits" and therefore avoid paying taxes on them. So -- I don't really get this thing about "paper" versus "non-paper" losses and profits.

But now I understand better. If you consider losing baskets to be "paper losses" and not real debt then all I can do is wish you luck. And, you know, if at some point your broker were to issue a margin call then those "paper losses" get converted to real money very quick regardless whether you wish to continue treating them as "paper" or not.

@wingate -- again, thanks for answering my question. I'm done and will stop trolling...
  • #619
  • Sep 18, 2020 5:37am Sep 18, 2020 5:37am
Don't have infinite equity, have a very modest amount actually That's why I trade very conservatively relative to my account size. Limit risk by following the measures outlined above
  • #620
  • Sep 18, 2020 6:06am Sep 18, 2020 6:06am
Quoting robots4me
{quote} @wingate -- this is good. Thanks for your answer. It also helps to explain part of the disconnect or disagreement we are having here. From an accountant's point of view (which I am not) -- everything in a financial account is either considered a credit or a debt. That's it. When tax time rolls around and my investments made money I can't suggest to my accountant that we treat them as "paper profits" and therefore avoid paying taxes on them. So -- I don't really get this thing about "paper" versus "non-paper" losses and profits. But...
YOU have got this SO WRONG just like most here my friend. I suggest you re-read my answer to your questions SEVERAL TIMES hopefully the penny will FINALLY DROP FOR YOU

I DO NOT consider A BASKET THAT I HAVE JUST CLOSED IN OVERALL PROFIT to be a LOOSING BASKET, why would I that would just be PLAIN STUPID would it not? That doesn't mean to say that there WERE NOT ANY LOOSING TRADES WITHIN THAT WINNING BASKET, more than likely there will be therefore those so called PAPER LOSSES have now become ACTUAL LOSSES whoopee, these losses are PART AND PARCEL of my TRADING THE FOREX, no different to a trader that INCURES HIS LOSSES due to accepting STOP LOSSES understand now? Comprehend ... Capishe? Loosing the will to live here guys, don't know how to explain this any simpler HELP
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